High Court finds contract to have been formed in two different jurisdictions

6 November 2013

In the case of Conductive Inkjet Technology Ltd v Uni-Pixel Displays Inc [2013] EWHC 2968 (Ch), the High Court has found that, for the purposes of establishing whether the English court has jurisdiction, a contract was formed in two different jurisdictions.

Facts

The case involved an application to set aside the permission granted to the claimant ("CIT") to serve two related claims out of the jurisdiction on the defendant ("UPD"), on the basis that there is no jurisdiction for such service or that such jurisdiction should not be exercised.

CIT was an English technology company in the field of inkjet printing. UPD was a Texan company and its activities included the design and manufacture of films to be incorporated into touch panels. CIT claimed that UPD had made use of CIT's proprietary information in breach of various confidentiality obligations owed to CIT. These obligations included provisions in a non-disclosure agreement (NDA) which was signed on behalf of CIT in England and by UPD in the US, having been agreed to by the parties in an e-mail exchange shortly beforehand. The parties opted not to include a choice of law and jurisdiction clause, as they could not agree on one.

Legal principles

The general rule with regard to the time and place of a contract's formation is that a contract is made at the time and place where acceptance of the relevant offer is communicated to the offeror. However, in Apple Corps Ltd v Apple Computer Inc [2004] EWHC 768 (Ch) the High Court made the obiter point that, in principle, it was possible for a contract to be made in two places at once.

Decision

Taking the obiter comments made in Apple Corps into consideration, the High Court upheld CIT’s argument that the contract had been made in both England and Texas.

In reaching his decision, Roth J considered the factual similarities between Apple Corps and this case, and in particular the fact that the parties had expressly agreed not to incorporate a choice of law and jurisdiction clause into the contract.

Comment

This decision will be interesting for parties from different jurisdictions contracting with each other. If either of the contracting parties intend for a particular law or jurisdiction to apply in the event of a dispute they ought to expressly provide for it in the contract.

It is of course generally preferable that parties to a contract have agreed such matters to provide clarity and reduce the risk of a dispute over jurisdiction further down the line. For a party in a dispute, where court proceedings are possible and jurisdiction is unclear, it is often sensible to seize jurisdiction by issuing proceedings in their preferred location first.